iRobot Corporation (IRBT, Financial), the company behind the Roomba vacuum, has issued a warning about its uncertain future following the collapse of a $1.7 billion acquisition deal with Amazon over a year ago. In its recent quarterly earnings report, iRobot expressed "substantial doubt" about its ability to continue operations, leading to a 37% plunge in its stock during early trading.
Based in Massachusetts, iRobot revealed that its board is evaluating "other strategic alternatives for the company's business," which could involve selling the company or refinancing its growing debt. This announcement comes approximately 14 months after Amazon abandoned the acquisition due to concerns from EU regulators, who had threatened to block the deal. Following this, iRobot's founder, Colin Angle, left the company, its stock price suffered a significant drop, and about half of its workforce was laid off.
Despite these challenges, iRobot has been striving to turn its fortunes around. The company recently launched eight new Roomba models, marking the largest product release in its 30-year history, hoping to boost its revenue after a 44% year-over-year decline in the fourth quarter. However, iRobot cautioned that there is "no assurance" these new products will succeed due to potential factors such as consumer demand, competition, macroeconomic conditions, and tariff policies.
CEO Gary Cohen remains optimistic, stating in the earnings report that these "powerful, breakthrough new product lines" should improve profit margins compared to earlier products and are expected to drive year-over-year revenue growth starting in 2025.
